Deal size: $2.3 billion
Date announced: October 1, 2015
In 2015, Big Pharma names such as Sanofi and Pfizer were lining up as potential suitors for Mexican generics firm Representaciones e Investigaciones Medicas, or Rimsa. But it was Teva that beat out the competition and scored a $2.3 billion buyout.
In the long run, though, it wasn’t a win. Far from it. Lawsuits, work stoppages and questionable numbers would plague the deal, and in the end, Teva only walked away with a confidential “insubstantial sum” following a settlement, Globes reported.
Before the sides reached that settlement, a lot went wrong with the takeover.
In striking the deal, Teva said Rimsa’s doctor relationships and its commercial presence would be key to the combination, and that it would build off Rimsa's operations to bolster its presence in the region.
Later, though, Teva said it found discrepancies between Rimsa's manufacturing processes and their descriptions in product registrations filed with regulators. The company said Rimsa concealed shortcomings in its products not only to Teva as a buyer, but also to regulators and patients.
In a lawsuit, Rimsa’s former owners said Teva suffered from “buyer’s remorse” and sought to escape the deal by ginning up false allegations. Teva “completely misunderstood what it was purchasing” and “did not understand the Rimsa companies or the Mexican market,” Rimsa’s former owners alleged in the suit.
Teva pledged a “forceful response” to the suit, but later, a Mexican regulatory agency sided with Rimsa. And in 2018, Teva inked its “insubstantial” settlement.
Teva has stumbled repeatedly in recent years, and the Rimsa buyout only represented a small piece of the company’s struggles. Teva also bought Allergan’s generics offerings in a disastrous M&A mistake featured in this report.
After Teva’s big generics buy, prices trended downward in the U.S., hitting the company’s revenues and forcing it to initiate a major restructuring, including more than 10,000 layoffs so far.